State budget deal threatens Medi-Cal care-givers.

Cuts totaling $330 million could devastate system

The budget agreement between Gov. Pete Wilson and the California Legislature has cut $330 million out of the 1992-93 Medi-Cal budget, The cuts are so deep that Medi-Cal providers are now claiming they could be completely wiped out. Such a scenario would be devastating, considering Medi-Cal providers service the health care needs of more than 4.36 million Californians, 1.46 million of whom live in Los Angeles County.

Medi-Cal is a state-administered fund that pays for basic medical care of California residents.

California's Legislature temporarily quit making Medi-Cal payments at the beginning of August. In the month that followed, many health care providers wouldn't' accept the IOUs, formally known as warrants, offered in lieu of checks by the state. As a result, thousands of patients went to emergency rooms and to Los Angeles County public hospitals because their doctors, no longer assured of payment, wouldn't see them anymore.

Several health-care experts and providers affected by the Medi-Cal funding cut-off said they think the governor and Legislature will face another shortage next summer unless more funding sources are found. Consequently, the list of Medi-Cal providers, especially obstetricians and gynecologists, will likely shrink.

Many providers who continued seeing Medi-Cal patients, in hopes that the budget quarrel soon would be resolved, borrowed money to keep paying their staff and rent.

Sometime before the end of 1992, as part of the solution to the state's budget woes, Medi-Cal benefits most likely will be cut. Furthermore, Medi-Cal providers with insufficient cash reserves are likely to go out of business, or at least have their credit tarnished, because they aren't receiving state reimbursements in time to meet business and personal financial obligations, said Medi-Cal providers.

Although the budget has been passed the Los Angeles health-care community won't get any reimbursement from Medi-Cal for 90 to 180 days from September 2, when the budget was approved, said David Langness, vice president of communications for the Los Angeles-based Hospital Council of Southern California.

Before the budget was approved, the State of California issued $190 million in IOUs every two weeks to Los Angeles County health-care providers that participate in the Medi-Cal program.

"We surveyed the Los Angeles health-care providers to see how long they could last without Medi-Cal funding. Of 20 hospitals that answered the survey, the average had enough cash to operate for 18 days. The one with the smallest reserves predicted it could last five days. The one with the most (cash) predicted it could stay open for 44 days," Langness said.

In the long run, Langness predicts the state will cut more funding from Medi-Cal than from education. The final budget clipped $330 million from Medi-Cal funding next year.

Many doctors have dropped out of the Medi-Cal system, but 17,251 received at least a portion of their income from the system in 1991, according to statistics supplied by Medi-Cal officials in Sacramento. Some 2,040 Los Angeles County health-care providers were reimbursed for more than $100,000 each in 1991. Throughout California, 6,552 providers received more than $100,000 in Medi-Cal payments in 1991, according to the California Department of Health Services, Medi-Cal Statistics Section in Sacramento.

Some 669 Los Angeles County physicians billed Medi-Cal for between $100,000 to $999,999 last year, according to the Sacramento statisticians. During that same period, 72 Los Angeles County hospitals received more than $100,000 in Medi-Cal reimbursements, as did 147 skilled nursing facilities, 127 dentists and 616 pharmacies, according to the Medi-Cal statistics.

Most ear-nose-and-throat doctors already have dropped out of the system. Only 10 out of 26 that received Medi-Cal reimbursements in Los Angeles County had Medi-Cal billings of more than $100,000 in 1991, according to state data.

Thirteen ophthalmologists had Medi-Cal billings exceeding $100,000 in 1991. All of the top 15 Los Angeles County obstetrics/gynecologists listed on the state's Medi-Cal provider list had annual billings of more than $100,000 to the system. The doctors who specialize in obstetrics and gynecology claim they are taking a big hit by accepting Medi-Cal payments for services rendered.

The long budget impasse and the resulting $330 million Medi-Cal cut for the coming year is making doctors even more wary of treating Medi-Cal patients.

Dr. Edward S. Tucker of Lynwood, an OB/GYN, billed an aggregate $1.2 million to Medi-Cal in 1991. He received $828,930. In another case, Dr. Silas Thomas in nearby Compton billed Medi-Cal for $1.72 million in 1991 and received $778,753.

"The government knew it was far away from a budget it could agree on months ago. I had to operate on credit (while the Legislature and governor were slugging it out over the budget) and am looking right now on whether or not I can keep treating Medi-Cal patients," Thomas said. He has been practicing in Compton for 10 years and last year filed 10,163 Medi-Cal claims. But he expects the state will be slower than ever to pay Medi-Cal bills in the future and that it will pay even less than it does now.

"There aren't many OB/GYNs who will treat Medi-Cal patients today because they only get paid one-third what they would receive from an insurance carrier. That combined with the malpractice insurance and all the litigation filed against doctors in this field already have caused many to quit seeing Medi-Cal patients. If they cut the benefits again, more of them (OB-GYNs) will quit seeing Medi-Cal patients," Thomas said.

The Motion Picture & TV Hospital in Woodland Hills received $7.14 million in Medi-Cal payments in 1991, more than any other Los Angeles County long-term-care facility. Spokeswoman Julie Davine said the facility cares for 70 patients and is part of a three-campus system that provides all levels of health care for people who work in the motion picture and television industries.

"We still took care of Medi-Cal patients even though the funding stopped," she said. The hospital is heavily supported by donations and endowments from present and past members of the entertainment community.

Even so, Motion Picture and TV Hospital has a higher average payment, $4,217 per claim, than any of the other top 10 Los Angeles County recipients of Medi-Cal payments for long-term-care facilities.

Nursing homes that cater to Medi-Cal patients could be closed down, if funding isn't restored, said San Pedro-based pediatrician Dr. Gary Krieger. If that happens, families of the elderly must take them into their homes or put them into the already-crowded county hospital system, Krieger said. He doesn't like the way the Legislature and Gov. Wilson. have handled the funding problem.

"There was a 25-percent increase in the use of hospital emergency rooms by patients when the Medi-Cal funding was stopped," Krieger said. They handled it this time, but there could be a severe crisis if the Legislature and the governor don't agree on a budget sooner next year, he warned.

Krieger is one of the few pediatricians in San Pedro still seeing Medi-Cal patients. "I told them (patients) that I couldn't keep seeing them past Labor Day," Krieger said.

Medi-Cal providers have applied political pressure, but Krieger said the teachers' union is making much more noise about cuts in their funding. As such, education will probably suffer fewer cuts than health care in the long run.

"The governor said he would eliminate the Medi-Cal funding problem, but there isn't going to be enough tax revenue this year to prevent us from having another budget shortfall next year," Krieger said.

Now that funding is restored, Krieger said Medi-Cal must spend its budget more wisely and quit funding for some procedures to compensate for the reduction in overall funding. Adult dentistry, nonessential surgery and emergency room coverage possibly should be dropped, Krieger said.